Walker & Dunlop, Inc. (NYSE: WD), the 8th largest commercial mortgage servicer in the United States as ranked by the Mortgage Bankers Association, announced today that its commercial mortgage servicing portfolio has grown by $10 billion in just ten months, surpassing $70 billion.
Stephen Theobald, Walker & Dunlop's Chief Financial Officer, commented, "What's really exciting is that as we have dramatically grown the servicing portfolio over the past five years, from just over $30 billion in 2012 to $70 billion in 2017, the rate of growth has accelerated and the average servicing fee has continued to increase."
As the corresponding graph shows, Walker & Dunlop added each incremental $10 billion of portfolio volume in less time, while steadily expanding the weighted average servicing fee from 23 to 26.5 basis points (as of June 30, 2017).
Walker & Dunlop's servicing portfolio is a very durable, long-term financial asset, similar to asset management fees or licensing fees in other industries. More than 85% of the Company's commercial mortgage servicing rights (MSRs) recognized are prepayment protected, meaning their value is unaffected by changes in interest rates and the servicing revenues due to Walker & Dunlop are contractually obligated until the loans mature – or are paid in full if a loan is pre-paid before maturity.
"The current servicing portfolio has an average life of 10 years, which represents nearly $1 billion of contractual future revenues to Walker & Dunlop," continued Mr. Theobald. "Growth in the portfolio since 2012, when Walker & Dunlop generated $41 million in servicing revenues, has translated into an annualized run rate of nearly $170 million of servicing fees in the first half of 2017. This explosive growth in servicing revenues has propelled our increase in adjusted EBITDA from just $29 million in 2012 to an annualized run rate of over $200 million in the first half of 2017. At the current rates of growth in both our loan origination and loan servicing businesses, our loan portfolio is well on pace to reach our established goal of $100 billion by 2020."
About Walker & Dunlop
Walker & Dunlop (NYSE: WD), headquartered in Bethesda, Maryland, is one of the largest commercial real estate services and finance companies in the United States providing financing and investment sales to owners of multifamily and commercial properties. Walker & Dunlop, which is included in the S&P SmallCap 600 Index, has over 600 professionals in 28 offices across the nation with an unyielding commitment to client satisfaction.
